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Sub-contractors in the construction industry |
| Exemption certificates. |
49. - (1) Sections 562 to 565 of the Taxes Act 1988 (exemption certificates for the scheme for sub-contractors in the construction industry) shall have effect in relation to any application to which this section applies, and shall be deemed always to have had effect in relation to such an application-
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(a) with the substitution of the subsection set out in subsection (2) below for the subsection (2B) inserted in section 562 by paragraph 4(3) of Schedule 27 to the Finance Act 1995 (which defined the payments to be taken into account in assessing turnover for the purposes of exemption); and |
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(b) as if paragraphs 3 to 5 of Schedule 8 to the Finance Act 1998 (which extended the description of payments for certain cases) had not been enacted. |
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(2) That subsection is as follows-
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"(2B) In subsection (2A) above "relevant payments" means payments under contracts relating to, or to the work of individuals participating in the carrying out of, any operations which-
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(a) are of a description specified in subsection (2) of section 567; but |
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(b) are not of a description specified in subsection (3) of that section, |
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other than so much of the payments as represents the direct cost to the person receiving the payments of materials used or to be used in carrying out the operations in question."
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(3) This section applies to any application for the issue or renewal of a certificate under section 561 of the Taxes Act 1988 which is or has been made with respect to any period beginning on or after 1st August 1999.
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Reverse premiums |
| Tax treatment of reverse premiums. |
50. - (1) Schedule 6 to this Act (tax treatment of receipts by way of reverse premium) has effect.
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(2) The provisions of that Schedule apply in relation to a reverse premium (within the meaning of that Schedule) received on or after 9th March 1999, unless it is a payment or other benefit to which the recipient was entitled immediately before that date.
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(3) In determining whether a payment or benefit was one to which the recipient was entitled immediately before 9th March 1999, no account shall be taken of any arrangements made on or after that date.
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Charities |
| Gifts in kind to charities etc. |
51. - (1) The following section shall be inserted after section 83 of the Taxes Act 1988-
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| "Gifts in kind to charities etc. |
83A. - (1) This section applies where a person carrying on a trade, profession or vocation gives an article falling within subsection (2) below to-
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(a) a charity within the meaning of section 506, or |
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(b) a body listed in section 507(1). |
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(2) An article falls within this subsection if-
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(a) it is an article manufactured, or of a class or description sold, by the donor in the course of his trade; or |
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(b) it is an article used by the donor in the course of his trade, profession or vocation which for the purposes of Part II of the 1990 Act constitutes machinery or plant used by him wholly or partly in the course of that trade, profession or vocation. |
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(3) Subject to subsection (4) below, where this section applies in the case of the gift of an article-
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(a) no amount shall be required, in consequence of the donor's disposal of that article from trading stock, to be brought into account for the purposes of the Tax Acts as a trading receipt of the donor; and |
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(b) section 24(6) of the 1990 Act shall not require the donor to bring into account any disposal value in respect of the article for the purposes of that section. |
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(4) In any case where-
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(a) relief is given under subsection (3) above in respect of the gift of an article, and |
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(b) any benefit received in any chargeable period by the donor or any person connected with him is in any way attributable to the making of that gift, |
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the donor shall in respect of that chargeable period be charged to tax under Case I or Case II of Schedule D or, if he is not chargeable to tax under either of those Cases for that period, under Case VI of Schedule D on an amount equal to the value of that benefit.
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(5) Section 839 applies for the purposes of this section."
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(2) Section 47 of the Finance Act 1998 (gifts in kind for relief in poor countries) shall cease to have effect.
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(3) Subsections (1) and (2) above have effect in relation to gifts made on or after the day on which this Act is passed.
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| Gifts of money to relieve refugee poverty. |
52. - (1) Section 48 of the Finance Act 1998 (gifts of money made for relief in poor countries) shall be amended in accordance with subsections (2) to (4) below.
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(2) In subsection (1)-
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(a) in paragraph (a), for "the first designation date" there shall be substituted "31st July 1998"; |
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(b) in paragraph (b), for "one or both" there shall be substituted "one or more". |
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(3) In subsection (2)-
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(a) in paragraphs (a) and (b) for "designated countries or territories" there shall be substituted "countries or territories designated for the purposes of this paragraph,"; and |
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(b) at the end of paragraph (b) there shall be inserted ", and |
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(c) the relief of poverty in the case of persons from any country or territory designated for the purposes of this paragraph who are refugees or who have suffered displacement as a result of organised intimidation or oppression or of war or other armed conflict." |
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(4) In subsection (9) for "this section" there shall be substituted "paragraph (a), (b) or (c) of subsection (2) above".
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(5) Any order made before the passing of this Act under subsection (9) of that section (designation of countries or territories in respect of which section 48 has effect) shall have effect as if made for the purposes only of subsection (2)(a) and (b) of that section.
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(6) Any notification given for the purposes of that section, in relation to a charity, before the passing of this Act shall be treated as a notification given for the purposes of that section as amended by this section.
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(7) This section has effect in relation to gifts made on or after 6th April 1999.
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(8) An order made under subsection (9) of that section for the purposes of subsection (2)(c) (as inserted by subsection (3)(b) above) may have effect retrospectively in relation to such times falling on or after that date as may be specified in the order.
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| Aggregation of money gifts for relief in poor countries. |
53. - (1) Section 48 of the Finance Act 1998 (gifts of money made for relief in poor countries) shall have effect, and be deemed always to have had effect, with the following amendments.
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(2) In subsection (4) (aggregated small gifts to be treated as a single payment made at the time of the last of them), after "that section" there shall be inserted "(but subject to subsection (4A) below)".
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(3) After that subsection there shall be inserted the following subsection-
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"(4A) Subsection (10) of section 25 of the Finance Act 1990 (receipts of gifts by a charity to be treated as payments of grossed-up amounts after deduction of basic rate income tax) shall have effect where-
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(a) any aggregated gifts are treated under this section as a single qualifying donation made to a charity, and |
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(b) the aggregated gifts include gifts made in different years of assessment, |
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as if that single qualifying donation had been received by the charity in the year of assessment in which the first of the aggregated gifts was made and as if that were the relevant year of assessment for the purposes of that subsection."
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Education and training |
| Employees seconded to educational establishments. |
54. - (1) Section 86 of the Taxes Act 1988 (employees seconded to charities and educational establishments) shall be amended as follows.
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(2) In subsection (3) (relief for expenditure attributable to the employment before 1st April 1997 of employees seconded to educational establishments), the words "and before 1st April 1997" shall be omitted.
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(3) In that subsection, for paragraphs (a) to (c) there shall be substituted-
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"(a) in England and Wales, any body falling within subsection (4) below; |
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(b) in Scotland, any body falling within subsection (5) below; |
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(c) in Northern Ireland, any body falling within subsection (6) below; and". |
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(4) After subsection (3) there shall be inserted-
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"(4) A body falls within this subsection if it is-
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(a) a local education authority; |
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(b) an educational institution maintained or otherwise supported by such an authority (including a grant-maintained school or a grant-maintained special school within the meaning of the Education Act 1996); |
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(c) an independent school, within the meaning of the Education Act 1996, whose registration under section 465 of that Act is final; or |
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(d) an institution within the further education sector, or the higher education sector, within the meaning of the Further and Higher Education Act 1992. |
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(5) A body falls within this subsection if it is-
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(a) an education authority; |
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(b) an educational establishment managed by such an authority within the meaning of the Education (Scotland) Act 1980 ("the 1980 Act"); |
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(c) a public or grant-aided school within the meaning of the 1980 Act; |
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(d) a self-governing school within the meaning of the Self-Governing Schools etc. (Scotland) Act 1989; |
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(e) an independent school within the meaning of the 1980 Act; |
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(f) a central institution within the meaning of the 1980 Act; |
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(g) an institution within the higher education sector within the meaning of section 56(2) of the Further and Higher Education (Scotland) Act 1992; or |
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(h) a college of further education within the meaning of section 36(1) of that Act. |
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(6) A body falls within this subsection if it is-
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(a) an education or library board within the meaning of the Education and Libraries (Northern Ireland) Order 1986; |
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(b) a college of education or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or independent school within the meaning of that Order; or |
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(c) an institution of further education within the meaning of the Further Education (Northern Ireland) Order 1997." |
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(5) The amendment made by subsection (2) above shall be deemed always to have had effect.
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(6) The amendments made by subsections (3) and (4) above have effect for the year 1999-00 and subsequent years of assessment.
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| Phasing out of vocational training relief. |
55. - (1) For subsection (2) of section 32 of the Finance Act 1991 (vocational training relief) there shall be substituted-
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"(2) The individual shall be entitled to relief under this subsection in respect of the payment for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (3) to (5) below apply.
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(2A) Where an individual is entitled to relief under subsection (2) above in respect of any payment made in a year of assessment, the amount of his liability for that year to income tax on his total income shall be the amount to which he would be liable apart from this section less whichever is the smaller of-
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(a) the amount which is equal to such percentage of the amount of the payment as is the basic rate for the year; and |
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(b) the amount which reduces his liability to nil. |
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(2B) In determining for the purposes of subsection (2A) above the amount of income tax to which a person would be liable apart from this section, no account shall be taken of-
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(a) any income tax reduction under Chapter I of Part VII of the Taxes Act 1988 or under section 347B of that Act; |
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(b) any income tax reduction under section 353(1A) of the Taxes Act 1988; |
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(c) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 of the Taxes Act 1988 or by way of a credit under section 790(1) of that Act; |
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(d) any tax at the basic rate on so much of that person's income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment." |
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(2) That section and section 33 of that Act (provisions supplementary to section 32) shall cease to have effect.
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(3) In this section-
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(a) subsection (1) has effect in relation to payments made on or after 6th April 1999; and |
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(b) subsection (2) shall have effect in relation to payments made on or after such date after 6th April 2000 as the Treasury may by order appoint. |
| Student loans: certain interest to be disregarded. |
56. The following section shall be inserted after section 331 of the Taxes Act 1988-
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| "Student loans: certain interest to be disregarded. |
331A. - (1) If-
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(a) a loan is made to a person under any of the relevant student loan provisions, |
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(b) an amount is recovered from him in respect of the loan, |
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(c) an amount is repaid to him in respect of the amount recovered, and |
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(d) interest is paid to him in respect of the amount repaid, |
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the interest shall be disregarded for all purposes of income tax.
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(2) For the purposes of subsection (1) above the relevant student loan provisions are-
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(a) section 22 of the Teaching and Higher Education Act 1998; |
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(b) section 73(f) of the Education (Scotland) Act 1980; |
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(c) Article 3 of the Education (Student Support) (Northern Ireland) Order 1998." |
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